POWER generation in Lesotho is set for a major boost after the African Development Bank (AfDB) approved a US$ 695 500 (M9.1 million) grant towards the development of 20 megawatt (MW) solar Photo Voltaic (PV) plant, the first utility-scale solar PV project in the country.
NEO I SPV Pty Ltd, a subsidiary of OnePower Lesotho Pty Ltd was recently awarded the multi-million maloti grant towards the development of the plant which is expected to feed at least 13 percent of the country's electric power demands into the national grid in the district of Mafeteng.
This will result in greater national independence in power supply and savings on the import bill through a gradual phase-out of power imports from Mozambique and a reduction of coal-generated power imports from South Africa.
The reduction of coal-generated power imports is also in line with worldwide trends of achieving clean power generations and reducing carbon emissions which contribute to climate change.
Ousseynou Nakoulima, the AfDB's Director for Renewable Energy and Energy Efficiency, recently said, "Our ambition is to turn it (the project) into a reference solar PV project for the SADC Region".
Once completed, Lesotho would have stolen a march over some of its SADC counterparts in terms of solar power generation.
Similar plans have been afoot in Zimbabwe since 2014 when three companies, two of them from China were awarded tenders to each construct 100 mw solar plants at a cost of US$240 million (M3,2 billion) each.
None of the plants have been constructed to date amid indications that some of the companies do not have the funding and expertise.
Mr Nakoulima said AfDB's to Lesotho was "instrumental in leading the project to financial closure by funding technical and financial services, environmental and social impact assessment, lenders' due diligence and risk allocation".
"In addition, the AfDB's Africa Climate Technology Centre (ACTC) will cover the costs for legal services and project implementation support."
The grant is administered through the AfDB's Sustainable Energy Fund for Africa (SEFA).
"The project is aligned with the AfDB's 10-Year Strategy focusing on inclusive/green growth through the delivery of energy access, the Bank's Energy Policy and the New Deal on Energy for Africa.
"On the national level, the project is aligned with Lesotho's National Electrification Master Plan (NEMP), the Lesotho Electricity Authority Act No.12 of 2002 and its National Rural Electrification Programme (NREP) as well as with the Government of Lesotho's Vision 2020 and its 5th Pillar "Poverty Reduction through Energy Access," AfDB says on its website.
The AfDB is Africa's premier development finance institution comprising of three distinct entities, namely, the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). It has 54 member states and branches in 34 African countries and an external office in Japan.
SEFA is a US$95-million multi-donor facility that was launched in 2012 and funded by the governments of Denmark, the United Kingdom, the United States and Italy.
It supports the sustainable energy agenda in Africa through grants to facilitate the preparation of medium-scale renewable energy generation and energy efficiency projects; equity investments to bridge the financing gap for small- and medium-scale renewable energy generation projects; and support to the public sector to improve the enabling environment for private investments in sustainable energy. SEFA is hosted by the Renewable Energy Department of the AfDB.